• confirm that your corporate policies
are in place for governance regarding
vendor management policies.
• Develop governance and controls to
establish pertinent metrics. additionally, review your vendors’ metrics, as
well as the structure and frequency of
their performance reports.
• assess your vendor’s policies for
safeguarding consumers’ personal
information. This includes their
adherence to the requirements of
numerous laws and guidelines, including the Gramm-Leach-Bliley act,
the Equal credit Opportunity act, the
real Estate Settlement Procedures
act, the Truth in Lending act, and the
• apply the requirements of the Dodd-frank wall street reform and consumer protection act as required by
the cFPB for property oversight of
•implement a standard risk-assessment framework that stratifies
vendors based on their risk to your
• clearly establish an expectation
with vendors that interviews and
walkthroughs will be completed
prior to an executed contract. Vendors also should expect ongoing oversight after the contract’s
• require vendors to provide the right to
audit them and their subcontractors.
• confirm a vendor’s ability to protect
information, confidentiality and con-
• clearly define default and termination policies in the event of a vendor poorly performing or failing to
maintain compliance with regulatory
• verify that the vendor maintains the
licenses required to perform the out-
• confirm that the vendor understands
and is capable of complying with fed-
eral consumer financial law.
• validate that the vendor has policies, procedures, internal controls
and training material to ensure that
consumer contact is in compliance
with federal consumer laws and
• verify that the vendor has an ade-
quate business-continuity plan.
• confirm that controls are in place to
handle consumer complaints accord-
ing to regulatory requirements.
• verify that technology systems
such as loan-origination and default-servicing systems have been updated to include current regulatory
• • •
as the year progresses, vendor com-
pliance will undoubtedly remain a
hot topic in the mortgage industry.
Some organizations may struggle to
stay on top of related rules and regu-
lations, while others will forge ahead
and rarely miss a beat. The banks and
brokerages that have solid vendor-
management controls and oversight in
place can better equip themselves for
a changing market and for continued
success in the future. •
4. “The Bank’s right to terminate the
contract if the Vendor materially
fails to comply with the terms specified in the contract, including the
terms required by this Paragraph.”
If your bank or brokerage hopes to steer
clear of a similar rebuke from the cFPB,
your organization should establish
prudent and thorough third-party
service provider due diligence and
management policies and programs.
There’s a number of areas where you
should focus your efforts in this regard,
but mortgage companies should work
especially hard to do the following:
« BEAS T continued from page 44
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